Former boss of HBOS Sir James Crosby admits his reputation lies in tatters

Sir James Crosby, the former boss of HBOS, yesterday admitted his reputation was in tatters as he faced calls to give up his knighthood over his role in the collapse of the bank.

The disgraced former banker issued a grovelling apology more than four years after the implosion of the stricken lender triggered a £20bn bailout from taxpayers.

‘I’m very sorry about what happened,’ said Crosby, who left the bank in 2006, just two years before it hit the rocks. ‘I’m apologising for the fact that I played a major part in building a business that failed.’

Appearing at the Parliamentary Commission on Banking Standards, Crosby conceded he was not fit to run a bank again.

His successor, Andy Hornby, was also grilled by the panel of MPs, peers and the Archbishop of Canterbury elect Justin Welby. He admitted the amount of bad loans made by HBOS was ‘appalling’.

But most of the venom was reserved for Crosby, who is widely seen as the forgotten man of the financial crisis.

In a humiliating cross-examination lasting more than two hours, Crosby was asked whether he saw himself as ‘fit and proper to run a financial company’. Crosby admitted he was ‘too closely associated with the failure of HBOS,’ adding that he would never seek to work in financial services again. He said: ‘I imagine if I made an application it would be refused.’

Asked whether he had considered giving up his knighthood for services to the financial industry, Crosby responded: ‘I am in no doubt that my reputation and achievements will ever again be seen in the same light.’

HBOS’s downfall led to the disastrous rescue takeover in September 2008 by Lloyds, which was then bailed out weeks later with £20bn of taxpayers’ money.

Lloyds has had to write off an estimated £26bn in bad loans by HBOS to businesses.

Crosby, who resigned as chief executive in 2006 with a £572,000 annual pension, has insisted the problems which led to the collapse occurred under his successor Hornby. But yesterday he was forced to admit that ‘incompetent lending’ had also occurred on his watch and that this led to the implosion of the bank.

Only one top boss – Peter Cummings, the former head of the corporate lending division at HBOS – has been fined and punished for the bank’s collapse.

Panel member Pat McFadden MP asked: ‘Do you understand the anger of the public who are coping with pay freezes, pay cuts, austerity – going on year on year – partly caused by the organisation you led?’